PRECIOUS-Gold holds steady as markets eye outcome of Fed meet

Reuters

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    * U.S. Fed's policy decision due at 1800 GMT
    * Palladium down more than 1%
    * Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser

 (Updates prices)
    By Brijesh Patel
    Sept 16 (Reuters) - Gold prices inched up on Wednesday on a
weaker dollar, with investors awaiting the outcome of the
Federal Reserve's policy meeting for details of the U.S. central
bank's plans to balance interest rates against its inflation
target.
    Spot gold  XAU=  was up 0.2% at $1,959.38 per ounce by 0645
GMT. U.S. gold futures  GCcv1  edged up 0.1% to $1,968.20.
    Offering support to gold, the dollar index  .DXY  remained
subdued against its rivals.  USD/ 
    "People are keeping on the sidelines because of the Fed
announcement coming up later today," said Brian Lan, managing
director at dealer GoldSilver Central in Singapore.
    "People are awaiting for more clarity on what monetary tools
the Fed is expected to use to support inflation above 2%."
    The Fed decision is due at 1800 GMT, followed by a news
conference by Chairman Jerome Powell half an hour later.
    The U.S. central bank last month adopted a more
accommodative approach to inflation and pledged to keep interest
rates low for longer.  urn:newsml:reuters.com:*:nL1N2FT0PR  urn:newsml:reuters.com:*:nL1N2GB1K7
    "Markets will want to see if the Fed will modify its
language as some expect, perhaps something to the effect that it
will keep rates low for a period of time (say three years) or
maybe do the same thing with its inflation language," said
Edward Meir, an analyst at ED&F Man Capital Markets, in a note.
    "But, we doubt the Fed will lock itself into such a fixed
language ahead of a potential turn in the U.S. economy."
    Lower U.S. interest rates put pressure on the dollar and
bond yields, increasing the appeal of non-yielding bullion. Gold
also is used as a hedge against inflation and currency
debasement.
    U.S. House of Representatives Speaker Nancy Pelosi said
Democrats were open to delaying an October recess to get a deal
with Republicans on a new coronavirus aid bill.  urn:newsml:reuters.com:*:nL1N2GC0M0
    Elsewhere, silver  XAG=  rose 0.1% to $27.26 per ounce,
while platinum  XPT=  dropped 0.6% to $971.96 and palladium
 XPD=  slipped 1.5% to $2,373.76.

 (Reporting by Brijesh Patel in Bengaluru; Editing by Uttaresh.V
and Sherry Jacob-Phillips)
 ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848
5832, Outside U.S. +91 8067493865; Reuters Messaging:
Brijesh.Patel1.thomsonreuters.com@reuters.net))

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